Headwin Engineering Ltd v. Kingspan China Ltd
Read the full judgment text of DCCJ 6328/2005 on BabelCite. This District Court judgment.
1. This is a claim by the Plaintiff against the Defendant for a sum of HK$470,073.60.
|
DCCJ 6328/2005 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL JURISDICTION ACTION NO. 6328 OF 2005 ____________ BETWEEN
____________ Coram: Deputy District Judge M. Chow Date of Hearing: 17th, 20th, 21st & 22nd November, 2006 Date of Handing Down Judgment: 5th December, 2006 __________________ JUDGMENT __________________ 1.This is a claim by the Plaintiff against the Defendant for a sum of HK$470,073.60. 2.The Plaintiff carried on business as a contractor in construction industry. 3.The Defendant is and was a supplier of insulated roof and wall system. 4.On 21st September, 2004, the Defendant and the Plaintiff entered into a contract. The Defendant agreed to sell and deliver; the Plaintiff agreed to purchase insulated roof cladding system at a total price of HKD$ 642,000.00 with standard packaging and shipment from the United Kingdom to Macau. 5.On or about 19th November, 2004, the goods arrived Hong Kong, due to the misplacement of another order of goods into the Plaintiff’s five containers, the Defendant requested to open the containers to locate the other lot of goods. 6.The Plaintiff was not present at the material time when the containers were opened. However, the Plaintiff was informed that the goods inside the containers were damaged. 7.The Defendant denied liability and required the Plaintiff to prove its case. 8.The Defence mainly disputed that: - the cause of the damage of the goods and in what circumstances and at what stage were the goods damaged. Expert Witness 9.Before going into the evidence of the witnesses, it is essential to deal with issue of the expert witnesses’ expertise, qualification and experience because the defendant disputes their qualifications as expert witnesses. They are: - PW3 Zennon Cheng and PW4 Terry Chan called by the Plaintiff. 10.PW3 is the managing director of Zennon and Pierre Marine Services Ltd. He has sea time experience and members of various institutes. He also attended a number of courses. These qualification can be seen on p33 and 34 of the bundles. 11.In Mr. Zennon Cheng’s evidence, he said that there was no particular institute to provide courses on the topic of “ assessment of damages”. The closest one would be the International Institute of Marine Surveying. He was a member since 2000 after he attended a one year diploma course. 12.By the time he received instruction from HSBC insurance in respect of this case, he has already gained 17 years of experience. He told this Court that he had previously given evidence on 4 other occasions, all in the High Court level and his evidence was accepted by the Court. 13.In respect of PW4, he had 14 years experience as Cargo Surveyor as at 2004. 14.He was qualified as a Container Inspector of the Institute of International Container Lessor, USA and performed container inspection in accordance with ISO standards. 15.He said that ‘to do assessment of damages’ was part of his daily duties. 16.According to the learned authors of Phipson on Evidence sixteen edition para 33-09.
17.As Mr. Zennon Cheng said that there was no single institute to provide such a course in the area of dispute which this Court is dealing with, he and his colleague’s experience derived from daily works and from the cases which they handled. 18.To this extend, I am of the view that by reason of their training and their actual on site experience, I do accept both witnesses are “expert” in this field. Admission By Vicky Wan 19.On 29th November, 2004, Miss Wan wrote a e-mail to her senior Mr. Julian Lee in which she mentioned that
20.Relying on the authority of RE Devala Provident Gold Mining Company (1883 ) 22 Ch D,593, Mr. Chan, Counsel for the Defendant, argued that the admission should not be admissible as evidence against the Defendant. 21.In my view, the decision of RE Devala is not applicable in the present case as Miss Wan was acting in her capacity and duty as an employee to report this event to her senior while in RE Devala the agent was making a confidential report to his principal. 22.I therefore ruled that the content of the e-mail by Miss Vicky Wan was admissible evidence against the Defendant. 23.It remains the question that what weight should I attach to this piece of evidence. 24.Miss Wan told this Court that it was her first time to witness the openings of the containers. Her duty was mainly administrative. She had been to the U.K. to see the manufacturing lines in KUEHNE & NAGEL and also their process of packing. 25.When the containers were opened, Miss Wan was able to form the view that the goods had been “improperly” handled and “improperly” packed. This comment by Miss Wan was very much in line of the expert witness’s opinion. 26.It is obvious that the packing of the goods inside the containers was not up to standard. 27.With this background in mind, I attached full weight to this piece of evidence. The Evidence 28.Mr. Lam was the manager of the Plaintiff and he signed the contract in respect of this claim with the Defendant. The copy of the contract is shown on p.88 of the trial bundle. 29.Mr. Tommy Cheng on behalf of the Defendant also signed the contract. He, later, was laid redundant in September 2004. 30.Both Mr. Lam and Mr. Tommy Cheng said that para (1) of the contract stated the conditions of sales at P.88.
31.As to the standard packaging, it can be seen at P.57 which listed out the basic requirement for packing that: -
32.Both Mr. Lam and Mr. Tommy Cheng’s evidence confirmed the purchase price including the loading services provided by the Defendant. 33.The Plaintiff engaged the services of KUEHNE & NAGEL for the purpose of “forwarder” only. If loading service was required, the Plaintiff had to pay extra costs to KUEHNE & NAGEL. In other words, packing of the goods was provided by the Plaintiff. 34.The insurance took out by the Plaintiff only commenced and covered from the time when the containers were placed on board the vessels. 35.It was not in dispute that it was not the first time the Plaintiff placed an order from the Defendant. Mr. Lam said that in previous dealings with the Defendant, the Plaintiff had no complaints against the Defendant, and all the previous packings by the Defendant were “正正方方”. These previous packagings can be seen from P.82, P.83 and P.84 of the trial bundle. I can see from these pages that all packings were neat and tidy in rectangular shape and with white plastic wrapping together with the trademark “Kingspan” appeared in the front. Mr. Tommy Cheng’s evidence was that it was necessary to put the trademark on the plastic sheet wrapping for identification purpose. While compared to the photographs on P.116 – P.152, the goods were placed in a disorderly manner. On P.121 and P.122, it can be seen that the roof panels on the left bottom of the containers were squashed and deformed. There was no proper packing. Only one pack of the goods had been wrapped in plastic sheets and with the trademark of Kingspan. Referring to the photograph on P.123, I can see the materials were torn and crushed to crumble. In short, I cannot see packing on the front of and the sides of the panels. I believe that there was no proper packing as to all the panels/ goods. 36.In addition, photographs on P.136 and P.137 showed that the long bars were bend at the end, unlike bars in a normal condition which should be straight. The reasonable inference from this would be that force had been applied to the bars. The ultimate cause of this may be due to insufficient space inside the container. Mr. Lam said that the goods had possibly been forced into the containers and this caused such serious damages. 37.In respect of the scratch on the container shown on P.119 and P.120, Mr. Zennon Cheng, Mr. Lam and Mr. Terry Chan also said that it could be the pre-existing scratch /dent. They, however, said that even if the scratch was done after the goods had been placed inside the containers, it would not have caused such serious damages to the goods. Furthermore, they said that the insulated roof was made of steel, which was a strong material and should not be easily damaged as in this case. 38.Both Mr. Zennon Cheng and Mr. Terry Chan confirmed that the damage of the goods was caused by: -
39.The Defence argued that the conclusion from Mr. Terry Chan could only be limited to the 45 feet container because he was not present when the other 4 containers were opened. 40.It was not in disputed that when the 4 containers were opened , Miss Vicky Wan for the Defendant was presented at the material time. She agreed that the photos at p 65 to 68 were taken when the containers were opened and she confirmed that the pictures reflected the conditions of the goods when the containers were opened. I can safely rely on this piece of evidence that the goods had not been tempered with when the pictures were taken. I therefore rule out the possibility that the workers might have removed any choking, lashing or stowing when removed the goods from the containers onto the ground. 41.Mr. Tommy Cheng who used to be a Sales Manager for the Defendant looked at the packings of these goods at photos P65 to 67 said that they were different from the standard packing as shown in P.82 to 85. The basis requirement was to wrap the goods with plastic sheets which showed the trademark of KINGSPAN , but that was not done in these 4 containers. He considered that the damage to the goods was caused by insufficient packing. 42.Miss Vicky Wan also considered the damage of the goods was caused by “improper handling” and “improper packing”. 43.In the opinion of Mr. Zennon Cheng and Terry Chan, they also confirmed that the goods in P.65 to 67 were damaged due to
44.Mr. Zennon Cheng who looked at the photos at P 120, 125, 130 and 131, he was of the opinion that the goods were damaged at the time when they were placed into the containers. 45.As to p.65 he said that the panels were all tipped to the right side of the container due to the lack of shoring. While at photos P66, he concluded that the goods were damaged due to the improper stowage. I can see that a smaller pack was placed at the bottom while the bigger piece was placed on the top. It is obvious that the damage was due to improper stowage. Photos 67 ( MSKU8657018 ) showed 2 bundles of goods were stacked on top of the other without lashing and shoring. Another photos at P67 ( TCNU9583666), the goods were damaged due to rough handling. Photos 68, the 45 feet containers, he said it was clearly a case that the goods were damaged by rough handling. I accept Mr. Zennon Cheng’s evidence and I agree with his opinion that the goods were damaged when they were placed inside the containers. I rule out any possibility that the goods were damaged after they were loaded onto the vessel. Mitigation of Loss 46.The Defence considered that the Plaintiff had not acted reasonably in mitigating its loss. The Plaintiff purchased the new roof panels and replacement from Easco Enterprises Limited ( EASCO ) instead of purchasing the same from the Defendant directly. This incurred extra costs of HK$35,833.04. 47.Mr. Lam for the Plaintiff said that since this incident, the Defendant had been “ blacklisted” and the Plaintiff would not trade with the Defendant anymore. This incident is an obvious reason that the Plaintiff has lost confidence to trade with the Defendant. 48.Furthermore, Mr. Tommy Cheng who used to be the Sales Manager of the Defendant has set up his new company. I consider that it was reasonable for the Plaintiff to place the replacement order from Mr. Tommy Cheng. 49.In fact, one has to bear in mind that the Plaintiff had incurred HK$100,000 to engage Easco to perform extra remedial works at Macau site for recovering damaged short panels so that the panels can be reused. 50.I agreed that what was reasonable depended on the circumstances of each case and it was a question of fact. Moore and other v DER Ltd (1971)3 AER 517. 51.In the present circumstances, I found that the Plaintiff had acted reasonably in mitigating its loss Delivery 52.The Defence relied on s.34 (1) of the Sale of Goods Ordinance, Cap. 34 which provides that: -
53.The Defence also relied on the letter from KUEHNE & NAGEL dated 3rd May, 2006 when Miss Vicky Wan informed KUEHNE & NAGEL that there was a litigation in respect of this particular shipment. 54.This letter was at the request from the Miss Wan, bearing in mind that when KUEHNE & NAGEL wrote this letter, they did not possess any document of this particular shipment and it was unknown on what basis that KUEHNE & NAGEL formed the opinion that when the goods arrived at their depot and loaded into the containers the goods were still in “good order and condition”. 55.One can see that the letter from KUEHNE & NAGEL was clearly for the purpose of this trial to assist the Defendant in defending its case against the Plaintiff. 56.To conclude, I attach no weight in this letter from KUEHNE & NAGEL. 57.As I have formed my opinion that the goods were damaged due to rough handling, insufficiency of packing and improper stowage. Therefore s.34 (1) of Sale of Goods Ordinance is not applicable in the present case. Conclusion 58.After I have accessed all the evidence before me, I accept the evidence of the Plaintiff’s witnesses. I am of the view that they are honest and reliable. In the premises, I enter judgment for the Plaintiff. Cost 59.In normal circumstances, cost follows the event. The Plaintiff is entitled to costs from the Defendant except 3 hours in conducting the examination in chief for the four plaintiff’s witnesses. 60.In the present case, the Plaintiff’s Counsel spent about 45 minutes to an hour, on average, for each witness in examination in chief, a total of about 3 hours, because the witness statements of each witness was so sketchy and brief that without the elaborated and detailed examination in chief, the plaintiff could not have succeeded in its’ claim. 61.Order: -
Ms Angel H.F. MAK instructed by Messrs. Danny Lau & Lam, for the Plaintiff. Mr. CHAN Pak Kong instructed by Messrs Peter Lau & Co., for the Defendant. |